304.29-081 Personal liability.
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The officers and members of the supreme governing body or any subordinate body
of a society shall not be personally liable for any benefits provided by a society.
Any person may be indemnified and reimbursed by any society for expenses
reasonably incurred by, and liabilities imposed upon, the person in connection with
or arising out of any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, or threat thereof, in which the person may be
involved by reason of the fact that he or she is or was a director, officer, employee
or agent of the society or of any firm, corporation, or organization which he or she
served in any capacity at the request of the society. A person shall not be
indemnified or reimbursed in relation to any matter in such action, suit, or
proceeding as to which he or she shall finally be adjudged to be or have been guilty
of breach of a duty as a director, officer, employee, or agent of the society nor in
relation to any matter in such action, suit, or proceeding, or threat thereof, which
has been made the subject of a compromise settlement, unless in either case the
person acted in good faith for a purpose the person reasonably believed to be in, or
not opposed to, the best interests of the society and, in a criminal action or
proceeding, in addition, had no reasonable cause to believe that his or her conduct
was unlawful. The determination whether the conduct of the person met the
standard required in order to justify indemnification and reimbursement in relation
to any matter described in the preceding sentence may only be made by the supreme
governing body or board of directors by a majority vote of a quorum consisting of
persons who were not parties to the action, suit, or proceeding or by a court of
competent jurisdiction. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or upon a plea of no contest, as to the
person shall not create a conclusive presumption that the person did not meet the
standard of conduct required in order to justify indemnification and reimbursement.
The foregoing right of indemnification and reimbursement shall not be exclusive of
other rights to which the person may be entitled as a matter of law and shall inure to
the benefit of his or her heirs, executors, and administrators.
A society may purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee, or agent of the society, or who is or was serving at
the request of the society as a director, officer, employee, or agent of any other firm,
corporation, or organization against any liability asserted against the person and
incurred by him or her in any such capacity or arising out of his or her status as
such, whether or not the society would have the power to indemnify the person
against such liability under this section.
History: Created 1988 Ky. Acts ch. 310, sec. 8, effective January 1, 1989.
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